The dispute involves Dr Philip Adams, a former IBM engineer, who
sued HP and other companies in 1998, alleging they sold millions of
defective computers to state agencies.
Adams claimed that those computers' floppy disk drives had flaws
that could result in the deletion or alteration of user data. Based
on Adams' allegations, state and federal officials launched an
investigation.
In 1999, Toshiba, which was also investigated in the case,
agreed to settle the dispute for up to $2.1 billion. Following the
settlement, class-action suits were filed against HP and four other
computer makers.
The case soon stopped attracting attention until last week, when
court documents revealed that Adams was appointed by HP in 2000 to
provide software to fix the flaws.
Although it denied selling defective computers, HP apparently
paid more than $27.5 million to license Adams' software fix and
prevent further legal action. According to media reports, the
California attorney general is now accusing HP of misleading the
investigation by not disclosing the deal.
HP has rejected the allegations, claiming it acted "entirely
ethically."
